Margin of Safety

For successful investing, it is not enough to take the time to identify and focus on companies that are fundamentally sound. A vital element to achieving outstanding returns in the long run is having the discipline to avoid investing in companies until their shares are available at a price that provides a meaningful discount to their intrinsic value. Just as importantly, buying at a discount provides a “margin of safety” to investors to account for unforeseen problems with the company or the industry it operates in, or lower company performance than originally forecasted.